Accounting (IFRS 9)
Implementation of IFRS 9 is a major challenge for Financial Institutions, especially in the area of credit risk with the transition to the expected credit loss model for recording impairments. Classifying Financial Assets optimally to reduce Equity and P/L volatility, and benefiting from the improvements to the Hedge Accounting models requires in-depth knowledge of IFRS 9, and of how those standards are implemented in practice.
O2 Finance has 20 years of experience with implementation of accounting change in the area of financial instruments. We have defined solutions with ALM, Investment Management, Treasurers that meet economic and accounting objectives, and have ensured efficient implementation in accounting processes.
For a large Insurer, we conducted analysis of impact of implementation of IFRS 9, in the 3 areas of change, i.e. Classification of Financial assets, Expected Credit Loss and Hedge Accounting. The project was led through workshops with Asset Management, Risk Management and Finance. The analysis enabled identification of key impacts and definition of approach for implementation.
In the second phase of the project, we are working on the actual implementation through a line-by-line assessement of the Classification for Financial Assets and development of an Expected Credit Loss model.